Propertymark has welcomed the Welsh Government’s policy to aggregate HMOs to be regarded as one single dwelling with a single council tax bill.   

Council tax bills are likely to be reduced for tenants – known in Wales as contract holders – by aggregating council tax as one unit for HMOs. 

The existing system where council tax is ‘disaggregated’ and billed for each HMO unit as a separate dwelling, has resulted in contract holders paying more than other residents on the same street, thereby leading to an unfair and inconsistent billing system.   

Also, by aggregating council tax bills for a single unit for HMOs, the system should be less complicated and will enable landlords to pay the council tax and proportion the final cost to each contract holder as part of their rent rather than the confusion from separate bills being issued.   

The Welsh Government is consulting to gather opinions on draft regulations to ensure HMOs are banded as a single property with one council tax band and to guarantee the HMO owner remains liable for council tax.   

Propertymark supports the definition of HMOs for council tax purposes as established in the draft regulations.   

The professional body has also recommended that the Welsh Government and the Valuation Office Agency communicates with all 22 Welsh local councils to regard any properties that fall outside of the definition that could be reasonably considered and to resolve these between the three parties.   

Other comments Propertymark made include prohibiting the retrospective re-banding of council tax bills and for them being charged to the landlords especially when the tenant has moved, and they have no forwarding address to recoup charges. The Welsh Government, the Valuation Office Agency, and Welsh local councils must explain any changes that property agents and landlords should be made aware of through appropriate communication.  

Finally, Propertymark argues that should the proposal be approved, the Renting Homes (Fees etc) (Wales) Act 2019 should be amended to enable landlords to charge tenants with the cost of council tax as a permitted payment. This would guarantee that landlords get reimbursed from the cost of aggregated council tax and that this should be fairly proportioned with other contract holders.   

Similar measures were introduced in England as of 1 December 2023, to value all Houses of Multiple Occupation as a single property (aggregated) for council tax purposes.   

Tim Thomas, Policy and Campaigns Officer at Propertymark, says: “The existing system that results in council tax being disaggregated needs some urgent reform as it leads to each HMO unit being regarded as a separate dwelling. We then end up with a disproportionate billing system, where contract holders are paying more than other residents in the same area. 

“Furthermore, local authorities should be prohibited from charging landlords council tax even after the tenant has moved out with no forwarding details. 

“It would be better if council tax is slashed for contract holders as a result of the suggested changes from the Welsh Government, as HMOs become a very popular and affordable choice for low paid contractors or those receiving means-tested benefits at a time when people are already struggling with expensive bills.”